under "the Companies Act, 1862" (25 & 26 Vict. c. 89), a shareholder, being also a creditor of the company, is not entitled to set-off the amount of calls which have been made upon him against the dividend payable upon his debt against the company, but must pay the calls before he has any right to receive a dividend with the other creditors; in the case of a company not limited, under the 101st section of the statute, a contributory may be allowed by way of set-off any monies due to him from the company on any independent dealing or contract with the company, but not any monies due to him as a member of the company in respect of any dividend or profit (a). In an action against an incorporated company or the public officer of a banking. company, the defendants may plead a set-off in respect of calls due from the plaintiff to the company (b). from trus tec. Since the Common Law Procedure Act, 1854, 17 & 18 Vict. Debts to or c. 128, s. 83, admitting pleadings on equitable grounds, it has been decided that a plea of set-off on equitable grounds may be pleaded in respect of a debt due from the plaintiff to a trustee for the defendant; and hence it seems that a similar plea in respect of a debt due from the real plaintiff on whose behalf the nominal plaintiff is suing as trustee, would be admissible (c). Before that statute the defendant could not plead that the plaintiff sued as trustee on behalf of a third person, and a set-off in repect of a debt due to the defendant from the latter (d); nor could the defendant plead a set-off of a bond given by the plaintiff to a third party and assigned to the defendant (e). dits with By the Bankrupt Law Consolidation Act, 1849, 12 & 13 Set-off of Vict. c. 106, s. 171, repeating previous enactments, it is mutual creprovided "that where there has been mutual credit given by bankrupt. the bankrupt and any other person, or where there are mutual debts between the bankrupt and any other person, the (a) In re Overend Gurney and Co., 35 L. J. C. 752; L. R. 1 Ch. Ap. 528; see Ex p. Barrett, 34 L. J. B. 41. (b) Moore v. Metropolitan Sewage Co., 3 Ex. 333; Milvain v. Mather, 5 Ex. 55. (c) Cochrane v. Green, 9 C. B. N. S. 448; 30 L. J. C. P. 97; and see (e) Wake v. Tinkler, 16 East, 36. Set-off of mutual cre dits with bankrupt. Court shall state the account between them, and one debt or demand may be set against another, notwithstanding any prior act of bankruptcy committed by such bankrupt before the credit given to or the debt contracted by him, and what shall appear due on either side on the balance of such account, and no more, shall be claimed or paid on either side respectively; and every debt or demand hereby made proveable against the estate of the bankrupt may also be set off in manner aforesaid against such estate; provided that the person claiming the benefit of such set-off had not, when such credit was given, notice of an act of bankruptcy by such bankrupt committed." Mutual credits under this section include a wider range of liabilities than the mutual debts which may be set-off under the general statute; they include all credits which from their nature must terminate in debts (a). But a claim for unliquidated damages arising from a breach of contract with the bankrupt is not a credit within the enactment (b). A claim for the price of goods sold to the bankrupt on credit, before the credit has expired, may be set-off under the section in an action brought by the assignees against the seller for a debt due to the estate (c). So, in an action by the assignees against the defendant for not accepting a bill of exchange in payment of goods sold to him by the bankrupt in pursuance of the contract of sale, the claim was held to be a credit given by the bankrupt to which the defendant might plead a set-off in respect of debts due from the bankrupt (d). But a similar claim for the price of goods sold, before the credit has expired, is not a debt within the general statute of set-off (e). Taking an acceptance of the bankrupt from a third person, is a giving credit within the statute (f). The defendant having taken the acceptance of the bankrupt before bankruptcy and indorsed it away, but it having been returned to him after the bankruptcy, it was held to be a credit within (a) Rose v. Hart, 8 Taunt. 499; 2 Smith's L. C. 5th ed. 251. (b) Bell v. Carey, 8 C. B. 887; Rose v. Sims, 1 B. & Ad. 521. (c) Atkinson v. Elliott, 7 T. R. 378. (d) Gibson v. Bell, 1 Bing. N. C. 713; Groom v. West, 8 A. & E. 758. (e) See ante, p. 548; Hutchinson v. Reid, 3 Camp. 329. (f) Hankey v. Smith, 3 T. R. 507. Taking the accept the statute which might be set-off (a). A composition deed under the Bankruptcy Act, 1861, ss. 192, 197, has a similar effect to an adjudication of bankruptcy dating from the registration of the deed, so that in an action by the trustees under such deed against a debtor of the bankrupt, the defendant may set-off all debts proveable against the estate, and all credits given to the bankrupt, under the above section of the Bankrupt Law Consolidation. Act; thus, rent, being proveable for a proportionate part up to the day of adjudication under the Bankruptcy Act, 1861, may be set-off, in such action by the trustees, for a proportionate part up to the registration of the deed (e). THE discharge of debts and liabilities arising from contract Discharge by bankruptcy is now regulated by "the Bankruptcy Act, by bankruptcy from 1861," 24 & 25 Vict. c. 134. By s. 161, it is enacted that, all claims "The order of discharge (substituted by this Act for the certificate of conformity, granted with the same effect under (a) Collins v. Jones, 10 B. & C. 777; Bolland v. Nash, 8 B. & C. 105. (b) Alsager v. Currie, 12 M. & W. 751; see Young v. Bank of Bengal, 1 Moore, P. C. 150. (c) Hawkins v. Whitten, 10 B. & C. 217; Dickson v. Cass, 1 B. & Ad. 343; and see Dickson v. Evans, 6 T. R. 57; Fair v. M'Iver, 16 East, 130; (d) Smith v. Hodson, 4 T. R. 211; (e) Stanger v. Miller, L. Rep. 1 proveable. Claims in bank ruptcy. the Bankrupt Law Consolidation Act, 1849, 12 & 13 Vict. c. 106) shall, upon taking effect, discharge the bankrupt from all debts, claims, or demands, proveable under his bankruptcy, save as herein provided (the saving refers to the cases under s. 159, in which the order of discharge may be made subject to conditions); and if thereafter he shall be arrested, or any action shall be brought against him for any such debt, claim, or demand, he shall be discharged upon entering an appearance, and may plead in general that the cause of action accrued before he became bankrupt." By force of the above enactment the order of discharge operates to discharge all debts, claims, and demands proveable under the bankruptcy, and may be pleaded in bar to any action brought for them. It may be pleaded to actions commenced before the order was obtained (a); but if the bankrupt neglects to plead it, and the plaintiff obtains judgment, it cannot be pleaded to an action afterwards brought upon the judgment (b). A mere adjudication of bankruptcy against the defendant and proof of his debt by the plaintiff under the bankrupty is no defence to an action for the debt either on legal or equitable grounds, but is only ground for an application to the Court to stay proceedings in the action (c). What debts, claims, and demands, are proveable under proveable the bankruptcy and, therefore, discharged by the order (those being convertible terms (d), are further particularly described in other sections of the Act (see the Bankruptcy Act, 1861, ss. 144-156), and in previous enactments (see the Bankrupt Law Consolidation Act, ss. 172-181). The full discussion of those enactments is beyond the scope of the present work, and will be found in works especially devoted to the law of bankruptcy; it will be sufficient here to notice generally some of the principal claims arising from contracts which, being proveable, are discharged by bankruptcy. Debts contracted Formerly, a debt contracted subsequently to the act of (a) Harris v. James, 9 East, 82. Spencer v. Demett, 4 H. & C. 127;35 (d) Bamford v. Burrell, 2 B. & P. 1, 11. bank bankruptcy was not proveable (a). But now by " the Bank- after act of rupt Law Consolidation Act, 1849," 12 & 13 Vict. c. 106, ruptcy. s. 165, (incorporating 46 Geo. III, c. 135, s. 2), it is enacted "that every person with whom any bankrupt shall have really and bona fide contracted any debt or demand before the issuing of the fiat or the filing of the petition for adjudication of bankruptcy shall, notwithstanding any prior act of bankruptcy committed by such bankrupt, be admitted to prove the same, as if no such act of bankruptcy had been committed, provided such person had not, at the time the same was contracted, notice of any act of bankruptcy by such bankrupt committed." Formerly, also, only debts absolutely due and certain in amount before the act of bankruptcy, (or subsequently to 46 Geo. III, c. 135, before the filing of the petition) could be proved; consequently, debts payable at a time then future, and debts payable upon a condition or contingency not then fulfilled, and liabilities not then liquidated and ascertained, were not proveable, and therefore not discharged by the bankruptcy; but by various enactments from time to time. made these various kinds of debts have, for the most part, been rendered proveable, and are now discharged by a certificate or order of discharge in bankruptcy. payable at bank A debt payable at a future time which has not elapsed Debts not at the time of the act of bankruptcy, as a bill or note the time of not then due, was originally not proveable (b); but now by the act of the Bankrupt Law Consolidation Act, 1849, s. 172, (fol- ruptcy. lowing 7 Geo. I. c. 31), it is enacted "that any person who shall have given credit to the bankrupt upon valuable consideration for any money or other matter or thing whatsoever which shall not have become payable when such bankrupt committed an act of bankruptcy, and whether such credit shall have been given upon any bill, bond, note, or other negotiable security, or not, shall be entitled to prove such debt, bill, bond, note or other security, as if the same was payable presently, and receive divi (a) Bamford v. Burrell, 2 B. & P. 1. (b) Callowel v. Clutterbuck, cited in 2 Str. 867; Ex p. East India Com- |